Australian luxury hotels up their game for Chinese tourists

With the Chinese now accounting for Australia’s largest group of tourists, hotels are going the extra yard to make their visitors feel welcome.

January 18, 2019

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JLL Staff Reporter

Congee at the breakfast buffet, Chinese signage, Chinese-speaking staff and bottled and hot water are common adaptations at some hotels as operators pursue the growing cohort of tourists from China, Taiwan and Hong Kong.

Expanding wealth in China has resulted in a booming number of tourists venturing out around the world. Australia pulls in more than 1 million visitors annually, a number that will continue to grow, based on projections of China’s increasing prosperity.

But as their spending capacity grows so does their taste for the finer things and with that comes a growing demand for luxury accommodation.

“We’re yet to even touch the surface of the Chinese luxury traveller,” says Ross Beardsell, JLL’s executive vice-president (strategic advisory). “Australia does a superb job attracting the group tour segment from China, but we’re yet to tap into the luxury market – the guest that will stay in 5-star hotels, referred to in China as 6-star, hotels.”

For hotel groups such as Accor, a strategic alliance with Huazhu Hotels Group has accelerated the development of the Grand Mercure, Novotel, Mercure, ibis and ibis Styles brands in China, Taiwan and Mongolia, which translates to more Chinese visitors using their hotels.

“With this comes an increase in brand awareness for our hotels and, as China’s outbound travellers grow exponentially, these brands are well positioned to capitalise on the influx of Chinese travellers to New Zealand and Australia,” McGrath says.

Luxe travellers boost demand

With Tourism Australia forecasting that Chinese annual spend on domestic travel, hotels and retail will hit $13 billion by 2020, Beardsell anticipates that the real impact on Australia’s hotels market is yet to be felt.

While he acknowledges the critical importance of having culturally-aware staff and offering the obvious things – menus, in-room guides, signage, etc – that are digestible and inviting to Chinese visitors, he highlights the need to balance making tourists feel at ease with providing a genuine Australian experience.

“International guests, whether from the northern hemisphere or our near-northern neighbours, are looking for a great quality room. And they also want some sort of local appeal.

“It’s not a matter of designing a room for the Chinese market, because they’re looking for an Australian luxury hotel experience.”

Destination outback

Helpfully, airlines are also getting in on the game. Since April 2018, flights out of Shenzen through Donghai Airlines have travelled direct to Darwin, and Perth has inbound tourist traffic from China Southern.

Plus, China’s strong cultural connection with wealth and luxury makes the Gold Coast a popular destination for more than its beaches, Beardsell says.

Places such as the ultra-luxury conservation-based Wolgan Valley resort near the Blue Mountains, as well as the Hunter Valley, are now hotspots for wealthy Chinese tourists.

Major potential

With the number of Chinese residents travelling overseas standing at around 100 million – of which roughly 1 per cent find their way to Australia – there’s huge scope for growth that is not lost on the hotels industry.

“As a business, we continue to learn more about what our Chinese guests are looking for in accommodation and experiences,” McGrath says.

“We know that bookings from China are increasing and this market remains an important one for our region, so we are continuing to grow in this area and assist our industry to better cater to Chinese travellers and grow the market even further.”

Taking cars off the streets

One of the keys to encouraging the use of public transport, walking and cycling, is to improve first and last mile connections, the Creating Liveable Cities Through Car-lite Urban Mobility report from the Urban Land Institute and the Centre for Liveable Cities suggests. Many cities have public transport, but nodes are often too far from people’s homes and destinations.

Many cities, including Singapore, are therefore looking at two-wheel options. Its “Walk Cycle Ride SG” plan is developing cycle routes across the island and also offers grants to developers for the construction of facilities such as showers and lockers in office buildings. New technology also has a role to play; the plan also suggest that “low speed self-driving pods” could be used within neighbourhoods in the future.

Tay says: “This will help to improve accessibility of buildings without direct and immediate access to public transportation. As Singaporeans turn increasingly to alternative modes of transportation to complement public transportation, it will be beneficial for developments to incorporate bicycle paths and end-of-trip facilities.

“Several developers have already started to incorporate these into their upcoming developments. These include Lend Lease at Paya Lebar Quarter, CapitaLand Mall Trust for Funan and Frasers Commercial Trust for Alexandra Technopark.”

New government policies will help to accelerate the growth of car-free infrastructure. ”To further infuse the walk, cycle, ride culture into the city’s DNA, the Government has started to require developers to submit a Walking and Cycling Plan as part of their development applications for new projects that are expected to have high levels of pedestrian and cyclist traffic,” Tay says.

Rethinking parking facilities

The ULI/CLC report also suggests that Singapore needs to stop forcing developers to include car parking in new buildings but rather to restrict future parking and to charge more for existing parking. Instead, buildings with “excess” parking could be granted planning permission for more commercial space in order to convert underutilised parking spaces to alternative uses.

Furthermore, in future, buildings without car parks could provide more valuable office, residential and retail space, while existing car parks could be converted. At present for example, most private residential estates have one car parking space per apartment, but many of these are not used.

Tay suggests that the use of some buildings could change as travel patterns and habits change, as Singaporeans use the car less. “The progression towards a car-lite nation would mean that real estate players and stakeholders have to re-learn the art and science of real estate development and space planning to cater to the needs of their occupiers and visitors arising from this lifestyle change,” she adds.

But what might happen in the unlikely event that Singapore does become completely car-free? Simply put, land and buildings previously used for car-related activities and services such as auto showrooms, auto repairs, servicing centres, roads and car parks will be freed up for other uses, Tay says.

“There will be greater opportunity for more community spaces, and Singapore would have more land to house a larger population. There might even be opportunity for home sizes to increase again as the availability of more land for homes could help keep land and home price appreciation in check,” she concludes.